So Rick Schwartz made the following tweet a couple days ago:
It isn’t just gTLD’s that are stalled. ALL extensions are stalling. The demand by END USERS in 2017 is not what it was years ago. #Domains
— Rick Schwartz (@DomainKing) March 1, 2017
This sparked a thread on Namepros where some questioned Rick and if there was a motive behind the post.
The person who started the thread I thought made a very good point, “While end user demand is decreasing, according to Rick, reseller prices at platforms like GoDaddy, NameJet and DropCatch are certainly not. “
It’s true that many have expressed an opinion that wholesale prices have been going nuts. There are many that do not understand how people bid up so-so names on GoDaddy to prices that sometimes rival end user pricing.
Amazon (for example) just invested in 52 new TLD’s, if anyone thinks they did that, just for tax purposes, your sadly mistaken. The bottom line is this…with all of the new gTLD’s and the abundance of short memorable domain names in new extension’s, to think that .COM is not going to take a sales hit, both in the numbers of domains sold on the secondary market and their overall sales prices is really not paying attention to the overall market and the market trends that are developing. There are only so many end users at any one time, although more will enter the market each day. eCommerce is growing by leaps and bounds, but so has the choices provided to end users by the introduction of a ludicrous amount of new TLD’s at one time! So it’s only economic law of supply and demand that maybe has some heavy .com holders feeling the pinch of less demand and lower resale prices at this time. It’s interesting times in this business and I feel you’re going to see many new trends develop, both bad and good, in 2017!
not sure but Rick stated he is buying more domains than at any point in the last decade.. perhaps he believes the market will go up?
To which member 168 posted:
Nice catch Dordomai,
Bought more domains last 12 months than anytime in a decade. Underwater domain investors FORCED to sell cheap. #Domains #domainsforsale
Pushing his own agenda looking for (or trying to create) good buys.
I found the tweet interesting because I have been pondering where is the future for the small to mid size domainer, will it still be a viable opportunity to make money ?
So with all these questions and certain people trying to understand what Rick meant, I emailed him at 3 am since I have been up all night. Rick was kind enough to reply with the following:
User demand is getting very close to peaking all over the Internet. Growth can not continue as it has. Can Facebook add more users now then early on? I doubt it. At some point there will be a wall and I think that point is quickly approaching. The domain game is evolving. Brandable domains are in vogue right now. But the brandable domain game is a very hard game to play and win. Talk about a lottery ticket.You have to figure that 100% of educated people with money are online today in some form. There are probably 2-3 billion people not online and may never be. And even if they are, they have NO buying power. But in my eyes, we have hit critical mass.
The net has hit critical mass. Twitter has hit a home run in 2016 and still losing money. Snapchat may be another Twitter. I got to hand it to them. They made billions with nothing but eyeballs.
Now with this said I do see a very strong and positive wave coming later this year and into 2018 and maybe a bit longer. But overall, I think we are at a peak that could expose itself at anytime.
My horizon is not days. I look in terms of years. Just like gTLD’s. I knew in about 3 years that would be when the rubber met the road. Over 90% of all gTLD’s sold are being registered by domainers and most of them are parked. They are losing steam and losing steam fast. When you look deeper you will see that the registries themselves are holding millions of these names just to pump up the numbers. So between registries and domainers, they have all been smothered. Normal everyday people have never even heard of these extensions and may never. Go ask folks. Keep asking. NEVER be scared to find out the reality as many do.
Amazon may keep growing but Facebook will find it more difficult. Amazon has a LOT of business still to take from Main Street. Sears is on Death Watch. Target may not be far behind. Much of that business is being taken by Amazon and there is NO CHANCE these stores will ever recover. They will have mass closing just to survive. It’s coming.
So domains are an important part of the Internet. Growth can not be expected to continue at the same rate as in the past. Look at all the crap that is being registered. Those are not domains, those are future drops looking for a sucker dumber than the original buyer.
The domain market is largely incestuous. The gTLD market is almost 100% incestuous. Meaning most business is domainer to domainer and not domainer to end user. Turnover on a portfolio is generally less than 1% a year. That means you will die before you sell all your domains. At some point liquidity inside can dry up.
Now domains are not going anywhere. But to not see the coming evolution can be costly. Nothing can grow at the same huge rates as early on and that includes domains. Lastly, just look at all the stalled and decreasing registrations for the majority of gTLD’s. After 3 years this is when they should be HOT and they are NOT!
End users have a need and demand for ONE domain at a time if that. Talk to end users. Ask them questions. Ask them about domains. I do that ALL the time. Whenever I travel and wherever I go. EVERY SINGLE DAY! And most will say “I already have a domain name that I registered at Godaddy.” They have more interest in asking me if Godaddy is good than about their domain name.
They all have a .com or a .net. or a cctld. PERIOD!
As I have stated, domainers are so concerned about their needs, wants and desires that they are BLIND to the needs wants and desires of the end users.They only see things thru THEIR eyes. Fpr over 20 years I have been targeting end users whether at TRAFFIC or on TWITTER. My goal is to have an end user have an aha moment. NOT EASY!
I know many great domainers with fantastic portfolios that are having a hard time paying the mortgage and making ends meet. So if these guys are struggling, what about all the Pigeon Shit farmers? They just quietly disappear.
I remain bullish on meaningful and great domains to a point. I remain bullish that those with inferior extensions want to have success and be able to afford a great .com domain. .Com is an upgrade and that won’t be changing.
If I had porno.com in 1000 other extensions, the total value of those other extensions would not equal one .com.
There is no question that the rate of growth of domain registrations is slowing down. It may even decrease at some point and that would not surprise me. If it surprises you, then the point of business is not be surprised but be PREPARED!